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New SMU Study: NEA Grants Do Not Primarily Benefit The Rich

bernierredmoney3Above: Roland Bernier, Red Money #3. Image outfront: Ron English, Money is the Root of All Art.

Does the National Endowment for the Arts tend to benefit the wealthy? Last year, a congressional committee report claimed NEA grants essentially transfer tax money from the poor to the rich. But KERA’s Jerome Weeks reports a new study from SMU challenges that claim.

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Rep. Paul Ryan grabbed headlines in 2012 when the House budget committee he chairs released a report claiming NEA grants are a “wealth transfer” from the poor to the rich. That report prompted calls to slash the NEA’s $146 million annual budget nearly in half or eliminate it entirely.

But a new study from SMU’s National Center for Arts Research finds that the arts and federal grants are more diverse than we think.

Says Zannie Voss, director of NCAR: There’s an incredible variety in terms of the art that is supported through federal funds that goes outside what we typically think of as ‘high arts and culture.’ ”

Voss notes that the original House committee report offered no facts to support its claim. It seems to be based on traditional assumptions that the arts are attended primarily by the wealthy.

So Voss and her team used the center’s database, the largest in the country, to test that assumption. They analyzed which communities receive NEA funding, and which do not. They found a community’s median household income was not a factor in receiving NEA grants; the grants are distributed impartially as far as income goes.

ZannieAs for how the wealthy might benefit from NEA grants, NCAR looked at attendance. Presumably, the wealthy have more access to the arts, have more time to attend them. Ergo, NEA grants to arts organizations benefit wealthy communities and the arts organizations that serve them by boosting attendance. But the study found that wealthy communities don’t necessarily have higher arts attendance (wealthy in this instance is defined as a household annual income of more than $200,000). In fact, arts attendance increases in communities that are more economically diverse. (Some of these seemingly counter-intuitive conclusions were first outlined in an earlier study.)

Voss (above) says that a weakness in using typical ‘high art’ examples, such as symphonies or art museums, to represent the entire cultural spectrum is that cultural organizations include such diverse outlets as science museums, photography galleries, community centers, literacy programs, youth orchestras and children’s theater companies. What’s more, the NEA awards grants for such groups to provide badly-needed after-school classes or rehabbing old buildings into performance spaces or developing online access to art. They often do not simply “support the art” — they often support access to the art, thus  helping people who might not be able to attend otherwise.

“My takeaway from it all,” says Voss, “is that the arts are far more democratic than they are given credit for.”

Voss says it may fly in the face of popular notions, but the NCAR study concludes that wealthier people receive no greater benefit from NEA grants than poorer people.

The full release:

 INDEPENDENT Study Finds that Communities with NEA-Funded Activities Are Economically Diverse, Questioning CLAIMS OF HOUSE BUDGET COMMITTEE REPORT THAT NEA GRANTS Disproportionally BENEFIT THE WEALTHY

 

NCAR Study Evaluates Wealth Distribution in

NEA Grant-Recipient Communities vs. Non-Recipient Communities

 

DALLAS (SMU) – The National Center for Arts Research (NCAR) at Southern Methodist University in Dallas, Texas, today released findings from an independent research study designed to evaluate wealth distribution in communities with arts organizations that receive grants from the National Endowment for the Arts (NEA). The study questions the claim from a U.S. House of Representatives Committee on the Budget report that NEA-funded programs “are generally enjoyed by people of higher-income levels, making them a wealth transfer from poorer to wealthier citizens.” A white paper on the study is available at http://bit.ly/NCARNEA.

To evaluate the relationship between NEA funding and community wealth, the study focused on whether or not NEA grant-making shows bias towards arts organizations in wealthier communities and whether or not NEA-funded activities primarily benefit the wealthy, based on attendance. The NCAR study had two main findings:

  • NEA grants are not disproportionately awarded in wealthier communities; rather, funding is more often awarded to economically diverse communities with both a higher percentage of households that are wealthy and a higher percentage of households that are below the poverty line. In addition, there is no significant difference in median household income in communities with an NEA-funded organization and those without. This finding indicates that there is no bias in NEA grant-making either towards or against organizations on the basis of the median household income of the surrounding community.
  • There is no relationship between arts attendance and the median household income of the local community. However, attendance increases with increases in the percentage of households below the poverty line and with increases in the percentage of households with incomes above $200,000.

“Because federal funding for the NEA is often called into question, it is important to be able to answer the question of who benefits from NEA grants from a statistically sound, data-driven perspective,” said Zannie Voss, director of NCAR. “Our analysis shows that the arts benefit Americans at all income levels, and that NEA funding of the arts is remarkably impartial to community wealth characteristics.”

To come to the first finding, the NCAR study revealed that there is no significant difference in median household income in communities with an NEA-funded organization and those without. NCAR also examined the distribution of income within communities and found that, on average, NEA grant-recipient communities are more economically diverse – with a higher percentage of household incomes both above $200,000 and below the poverty line – than those without NEA-funded organizations. The study also found that, although a greater amount of funding is given to more populous communities, the NEA dollars per capita actually increase as a community’s population decreases.

To arrive at the second finding, NCAR examined whether wealthier individuals are more likely to benefit from the arts than poorer individuals, with “benefit” defined as physical attendance at an arts organization. The analysis showed that as median household income in a community increases, local arts organizations do not experience an increase or a decrease in attendance. In fact, attendance increases in more economically diverse communities – when percentages of both wealthy households and households below the poverty line increase.

The Fiscal Year 2014 Omnibus Appropriations bill, signed into law by President Obama in January 2014, maintained funding for the NEA at $146 million, although the House budget proposed in March 2013 called for a 49% reduction in its funding.

“As an academic institution educating future artists, arts managers, and arts entrepreneurs, it is essential that we have an in-depth understanding of our industry,” said José Bowen, dean of the Meadows School of the Arts at SMU. “We established NCAR to create this complete picture of the arts industry and to act as a catalyst for the transformation and sustainability of the national arts and cultural community. For the first time, we have the capability of looking at questions such as those raised by the House and providing statistically-supported answers.”

 

About NCAR

In 2012, the Meadows School of the Arts and Cox School of Business at Southern Methodist University launched the National Center for Arts Research (NCAR). The Center, the first of its kind in the nation, analyzes the largest database of arts research ever assembled, investigates important issues in arts management and patronage, and makes its findings available to arts leaders, funders, policymakers, researchers and the general public. The vision of NCAR is to act as a catalyst for the transformation and sustainability of the national arts and cultural community.

With data from the Cultural Data Project  (CDP) and other national and government sources such as the Theatre Communications Group, the National Endowment for the Arts, the Census Bureau and the National Center for Charitable Statistics, the National Center for Arts Research will create the most complete picture of the health of the arts sector in the U.S. The goal of the Center is to become the nation’s leading source of expertise on: 1) arts attendance and patronage, 2) understanding how managerial decisions, arts attendance and patronage affect one another, 3) the impact of the arts on communities across the U.S., and 4) the fiscal trends and fiscal stability of the arts in the U.S., and create an in-depth assessment of the industry that allows arts and cultural leaders to make more informed decisions and improve the health of their organizations.

The project’s indices and dashboard were created in partnership with IBM, TRG Arts and Nonprofit Finance Fund (NFF). The Center also partnered with the Boston Consulting Group (BCG) to develop its mission, vision, and long-term strategies.

NCAR is led by Dr. Zannie Voss, chair and professor of arts management and arts entrepreneurship in the Meadows School of the Arts and SMU Cox School of Business, and Dr. Glenn Voss, Endowed Professor of Marketing at Cox School of Business. Through this leadership, NCAR sources its cross-disciplinary academic expertise in the fields of arts management, marketing, and statistics from Meadows and Cox faculty.

More than a dozen visionary foundations and individual arts patrons have supported NCAR with financial investments, including the Communities Foundation of Texas, M. R. & Evelyn Hudson Foundation, Carl B. & Florence E. King Foundation, Jennifer and Peter Altabef, Marilyn Augur, Molly Byrne, Bess and Ted Enloe, Melissa and Trevor Fetter, Carol and Don Glendenning, Jeanne R. Johnson, Nancy Nasher, Nancy Perot, Bonnie Pitman, Caren Prothro and Donna Wilhelm.

For more information or to view the National Center for Arts Research’s inaugural report, please visit the NCAR website at smu.edu/artsresearch.

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  • James Abruzzo

    This study demonstrates the value of data, thank you Zannie and company. However, there is a broader federal issue of access based on income that may tell a different story. First, I have always felt that the NEA is a canard, a kind of whipping boy for the conservatives. At $140 million, minus administration and geographic mandated distribution, the discretionary NEA funding is frankly insignificant. More significant is the indirect federal contribution to the arts organization and how that support likely does favor the richer. Major individual giving represents the largest proportion of contributions to the arts and those with more wealth are they who contribute most, both nominally and proportionately. For every $1 contributed by a wealthy board member, she receives a “refund check” from the government about 30 cents. That is 30 cents of federal funding not going to food programs, etc. And with those large contributions come perks not available to the hoi poloi (better seats, valet parking, etc).

    I am not arguing against any of this – the federal funding, the advantages of contributing – just pointing out that the conservatives are concentrating on the wrong issue. And I suppose, if one wants the arts supported in this country, and the tax benefits to remain, the NEA could and should remain the whipping boy that offers a distraction Senator Ryan and others.

  • JeromeWeeks

    Thanks for writing. A thoughtful point.

    But it could be argued that because wealthy patrons contribute more to non-profits, a tax break is actually a cost-effective way of funding the arts (and schools and non-profit hospitals, charities, churches, etc.). In other words, yes, 30 cents of every $1 donated is lost tax revenue, but consider what it’d cost the federal government (and us taxpayers) if it tried to fund such organizations completely, and some of these organizations and programs (schools and hospitals, certainly, but also other efforts like re-training the workforce or free-lunch programs) are – if not outright necessities, certainly near-necessities.

    It’s also possible to argue that encouraging philanthropy through such tax breaks encourages a “wealth transfer’ downward, and not upward as Rep. Paul Ryan claims. That is, there are far more poor people than wealthy ones, and they would seem to benefit in more appreciable ways than the wealthy. Yes, we still lose tax revenue, and the wealthy, as you say, get “perks not available to the hoi polloi” (hanging out with artists? free t-shirts? their name over the door?) but large numbers of poor people, working-class people, even us middle-class sorts, now get access to arts and arts education programs we wouldn’t otherwise be able to enjoy.

    • James Abruzzo

      I think the best benefit of this indirect transfer to many nonprofit organizations, is the healthy competition it creates which, ultimately benefits the consumer. Donors are attracted to well run arts organization that provide great art as well as great customer service. When the German government was supporting 85-90% of the funding to its opera houses, there was little incentive for the Intendente to care about the audiences since they didn’t pay the bills and they had no control over how such a house would be funded. One need to just visit the public and private museums in Italy, Spain, France or Denmark to witness the attention to detail provided by the latter.

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